Better Decision Making in Turbulent Times
“Let’s see how it plays out.”
It’s a phrase that has been uttered by many leaders over the past two years. Unfortunately, it resigns us to a reactive frame of mind that it’s difficult to escape.
It’s time to find a way out of the fog and take control of our organisation’s destiny…
Good decision making systems are a hallmark of great companies. How can you make faster and better decisions, but make sure they stand up in the turbulent environment we’re operating in?
Delay is a decision
When we delay a decision, we are making a decision. We’re saying, ‘This can wait. There are other priorities right now’.
Or, ‘no we’re not going to invest resources in gathering data to make a decision’.
It’s important not to lose sight of why we were considering a decision in the first place. Those issues that play on our minds and demand our thinking time are often issues that we really need to confront.
The nagging feeling of a competitive threat. The sense that a strategic question needs closure. Making a tough call on personnel that will have consequences.
In the same way we keep a ‘to do’ list of the things we need to do, its valuable to have a ‘to don’t’ list for those things that we want to steer clear of right now. But the trick is having a trigger. When should it become a live issue? When will we need to make a decision? That way we quieten the nagging subconscious and clarify when a decision is necessary. And if you can’t find a trigger, there’s a good chance you should’ve made the decision already…
Speed up your decision cycle
Eric Schmidt, former CEO of Google, describes how Google is able to maintain rapid progress and continuous innovation through rapid decision making.
“The most important thing to do is to have quick decisions—and you’ll make some mistakes, but you need decision-making.”
Even at Google’s scale, decisions are made quickly. There’s fewer decision makers and clear owners.
“I always tell people, somebody is running your company. What are they doing? Why don’t they just make this decision? Even if it’s the wrong decision, a quick decision is better in almost every case.”
In Scrum: The Art of Doing Twice the Work in Half the Time, Jeff Sutherland describes the ‘OODA loop’, a concept developed by military strategist and US Air Force Colonel John Boyd.
The OODA codifies the idea that decision making is a cycle of four stages – Observe, Orient, Decide, Act. Just as fighter pilots make a rapid series of high stakes decisions, the concept is applicable to business too. We need to separate the idea of collecting facts (Observe) from defining our option set (Orient). And that the outcomes of our actions becomes observations that quickly feed into the next decision.
Sutherland summarises the OODA loop as follows: “See the whole strategic picture, but act tactically and quickly.”
Get the right information
Making fast decisions doesn’t mean simply running on intuition or flying against the face of facts.
Facebook is well known for its speed of execution and its early mantra ‘move fast and break things’. But that doesn’t mean decisions are made blindly.
Facebook Director of Engineering, Jocelyn Goldfein, says that “Our job as a management team is actually to plug every individual into as much information as possible about what’s going on so that everybody can make the very best decision”. And how they use that information is then to go and try things, rather than ask permission, and course correct if necessary. “It’s a “try catch” model of decision making, not an “if then”. Moving faster also means course correcting faster.
It’s a similar story at Atlassian where the company is using evidence-based management to increase team performance, as part of its aim to become “scientific experts in teamwork”.
Key steps to facilitate evidence-based decision making include:
- Investing in strong systems to efficiently collect and use data
- Nurturing a culture of questioning and exploration; and
- Facilitating collaboration and knowledge exchange across teams.
Make smaller bets first
Long before the Lean Startup popularised the Build, Learn, Measure cycle, Jim Collins described in Good to Great the idea that the great companies “fire bullets, then cannonballs”.
The idea is simply that you might have to try a lot of things to find out what works, but you want to do them at a small scale first. And when you have reliable evidence that they’re working, that’s the point at which to scale and get the most out of them.
In a word: experimentation.
But its high-impact experimentation rather than focusing on low-level changes that aren’t going to drive you towards your business goals. Yes, small changes do add up, but don’t let bureaucracy and fear get in the way of pursuing the big opportunities.
In the TED talk, Dare to Disagree, Margaret Heffernan describes that “85% of [surveyed executives from the US and Europe] them acknowledged that they had issues or concerns at work that they were afraid to raise… Afraid of the conflict that that would provoke, afraid to get embroiled in arguments that they did not know how to manage, and felt that they were bound to lose.”
Imagine how much this is costing – in wasted time, money and talent…
“And it means that people like many of us, who have run organizations, and gone out of our way to try to find the very best people we can, mostly fail to get the best out of them”
This is one of the reasons it’s so critical to have a healthy and aligned leadership team, the #1 Rockefeller Habit and a non-negotiable if you want to scale a company.
Side note: This is one of the key reasons a coach can be so valuable – you will be challenged in ways that your own team is simply unable or unwilling to do.
Of course, we all want faster decision making.
But achieving it – particularly in turbulent times – requires us to make smaller decisions that can we build upon, get information in the hands of (clear and few) decision makers and actively embrace the tough conversations that lead to good decisions.
We hear the term ‘fail fast’ a lot these days.
But it’s very easy to lose the nuance that the goal is rapid learning. The concept of failure suggests that there is a clear demarcation between success and failure, rather than simply obtaining enough insight to consider: Do we keep going or change course?
Pete has worked with the leaders of startups, government and publicly-listed companies for over 15 years, providing advice on strategy, operations and technology issues. He is the founder of Starteer and helps founders and CEOs to achieve sustainable growth.